On 30 May 2013 the Victorian Competition and Efficiency Commission (Commission) was directed to conduct an inquiry (the Inquiry) into aspects of the Wrongs Act 1958 (Vic) (Act).  The Act is the principal piece of legislation which regulates claims for damages for personal injury and death in Victoria, amongst other things.

The purpose of the Inquiry is “to identify and make recommendations to address any anomalies, inequities or inconsistencies in the Act relating to personal injury damages”.  The impetus for the Inquiry appears to have arisen from concerns that the Victorian tort law reforms made in 2002/2003 in response to the insurance crisis of the late 1990s/early 2000s:

  • Unnecessarily or unjustifiably restrict access to compensation; and
  • Disproportionately restrict the rights of plaintiffs, leading to an unequitable denial of compensation or under-compensation.

The tort law reforms of 2002/2003 were intended to address the problems of rising professional indemnity and public liability insurance premiums, the withdrawal of some insurers from certain lines of business and the reduced availability of insurance covers.  Importantly, the Inquiry is not intended to consider the objectives of the tort law reforms or make recommendations which compromise those objectives.  Rather, the Commission is directed to make recommendations in relation to personal injury damages, including:

  • The limits placed on damages for economic and non economic loss;
  • The limits placed on damages for gratuitous attendant care and loss of capacity to care for others; and
  • Discount rates used for calculating lump sum damages for future economic loss.

In making recommendations, the Commission is required to have regard to:

  • Whether options would have an unduly adverse impact on the price or availability of public liability or professional indemnity insurance in Victoria;
  • The risk faced by potential defendants of unmeritorious litigation;
  • The possible impact on decision making and administrative bodies, including Courts and the Medical Panels; and
  • Consistency with other legislative regimes regulating compensation for personal injury, particularly theAccident Compensation Act 1985 (Vic) (which regulates workplace accidents) and the Transport Accident Act 1986  (Vic) (which regulates transport accidents).

Status of Inquiry

In July 2013, the Commission released an Issues Paper outlining the Commission’s views on the scope of the Inquiry and the key issues.  In response, interested parties and stakeholders made submissions dealing with issues pertaining to the significant injury threshold which a claimant must satisfy in order to be able to claim damages for non-economic loss.  The issues addressed in the submissions dealt with problems with the assessment of impairment process that are frequently encountered in  practice and can operate unfairly and/or inconsistently for respondents and can result in increased claims costs.  

The Commission released a draft report in November 2013 (Draft Report) which contained several draft recommendations.  Following the release of the Draft Report, Norton Rose Fulbright  participated in a Round Table discussion with the Commission, together with other practitioners, insurers and stake holders who manage in personal injuries litigation in Victoria.  

Issues Raised at the Round Table Conference

Some of the issues discussed at the Round Table discussion are summarised below.

Timing of Service of Certificate of Assessment

  • Under section 28LE of the Act, to be entitled to claim damages for non-economic loss a claimant must demonstrate that he or she has suffered a “significant injury”.   Whether an injury can be regarded as significant is assessed by an approved medical practitioner or by the Medical Panel under section 28LF.  This assessment is documented in a Certificate of Assessment under section 28LN and must state whether the degree of impairment satisfies the requisite threshold level.
  • A claimant must provide a copy of a Certificate of Assessment to the respondent under section 28LT, unless that information has already been communicated through other means.  However, the Act currently fails to specify a time in which the certificate must be served.
  • The absence of a requirement of service of a Certificate of Assessment in a timely way enables a Certificate to be served at a time of the claimant’s choosing.  This may result in delay and unnecessary legal costs, and cause prejudice to the respondent or compromise a trial date.  It may create uncertainty in quantifying claims.
  • Potential solutions discussed at the Round Table discussion included giving Courts power to make interlocutory orders for the service of certificates of assessment and/or the creation of Court Rules or Practice Notes regulating the service of certificates.   

Service of Prescribed Information

  • Section 28LT requires claimants to serve certain information including the details of any medical practitioner who has treated the claimant’s injury.  It is not uncommon for claimants to serve Certificates without any other medical information (including any report authored by the assessor).  These omissions hamper a respondent’s ability to gauge whether or not a medical question should be referred to the Medical Panel.  There is currently no sanction for a claimant who fails to provide the Prescribed Information.  There is also an absence of any effective or equitable recourse to a respondent who receives incomplete information.
  • Arguably, a failure to provide the Prescribed Information means that no proper service of the Certificate has taken place and the time limits in 28LW are not triggered.  However, a prudent respondent will not feel comfortable in simply assuming that the time limits for referral do not apply. 
  • During the Round Table discussion, it was noted that the failure to provide full and complete prescribed information increases the burden on the Medical Panel.  The use of a prescribed form (including in electronic format) for the provision of prescribed information was proposed.  The suggestion of a “hard gate” which the claimant must satisfy with regard to the provision of Prescribed Information before a claim could be validly made did not appear to have the support of the Commission.

Multiple Respondents

  • Section 28LWC states that an acceptance (of an impairment assessment) under Division 4 of Part VBA of the Act does not bind any other respondent to the claim.  The effect of the provision is that each respondent must respond to a certificate of assessment, unless a respondents’ claim manager is appointed under section 28LU.
  • In claims involving multiple respondents, this can give rise to the situation where different respondents have different responses to the assessment.
  • A regular situation arises where one or more respondents accept the certificate of assessment or are deemed to have accepted the assessment by virtue of sub-section 28LW(4), whilst other respondents refer a medical question in relation to the assessment to a Medical Panel for determination. 
  • Where the Medical Panel finds that the degree of impairment resulting from the injury does not satisfy the threshold level, this gives rise to the potentially incongruous situation where the claimant may assert an entitlement to damages for non-economic loss against those respondents who accepted the assessment, but is prevented from asserting an entitlement to damages for non-economic loss against those respondents who referred the matter to the Medical Panel.

Whilst these issues were discussed at the Round Table meeting, it appears unlikely that the Commission will make any recommendations as they are fraught with difficulties.  It seems more likely that these issues will be left to be dealt with by the superior Courts in an appropriate case.

The Commission’s Final Report

The Commission is to provide its final report to the Treasurer of Victoria by February 28 2014.  The Treasurer should publically release the Final Report and the Victorian Government should release a public response within 6 months of the Treasurer receiving the Final Report.

Interested parties and stakeholders keenly await the Commission’s Final Report and the government’s response, with hopes that steps will be taken to remove the uncertainties which currently surround the impairment assessment process and entitlements to damages for non-economic loss, and which may potentially prejudice respondents.